Barker Martin

Condo-HOA Blog

Association D&O Coverage

Typically, in order to trigger a Director and Officer's (D&O) coverage, a claim must be "made" within the policy period. This is commonly referred to as a "claims made" policy. Many D&O policies also require that the claim be reported during the policy period. These are commonly referred to as "claims made and reported" policies.

We are often asked: When should an association report a claim or potential claim to its D&O insurance carrier? Unfortunately, there is no one size fits all response. The definition of a claim varies from policy to policy and should be reviewed to determine if a claim should be reported. A typical policy definition of a "claim" can include written demands alleging a wrongful act by a director or an officer in his or her capacity as a director or an officer that seeks monetary or non-monetary damages.

So, for example, if an association receives an email from an owner alleging that the board has done some "wrongful act" and claims that they are entitled to monetary or non-monetary relief, there is a good chance that the association's D&O carrier should be notified. Be just as wary of a claim for non-monetary relief as a claim seeking money damages. Defense of a non-monetary claim can be just as costly as a claim that has a dollar amount attached to it. If your association is concerned about whether or not a fact scenario warrants or requires reporting, the team at Barker Martin is here to help evaluate and advise.